Increasingly, Gifts to Colleges Come With Strings Attached

May 18, 2011

At a time when college and university endowments are down and school budgets are strained, a growing number of wealthy donors are attaching sometimes-questionable demands to their multimillion-dollar gifts, the Washington Post reports.

These days, donors often are looking for more than their name on a building; they want to have a direct say in how their gifts are used. John Allison, former chair of BB&T, a bank holding company, launched a giving program through the BB&T Charitable Foundation that awards grants of up to $2 million to colleges that agree to teach a course on capitalism which makes Ayn Rand's Atlas Shrugged required reading. Faculty at several of the approximately sixty schools that began teaching the book criticized Allison for using his philanthropy to push a political agenda. But Allison, now a professor at Wake Forest University's Schools of Business, defended the program, telling the Post that the foundation "sought out professors who wanted to teach these ideas."

Elsewhere, Robert Burton, an investment manager in Greenwich, Connecticut, made news earlier this year when he withdrew a $7 million gift to the University of Connecticut after the school hired a new football coach without first consulting him, as per their agreement; Burton and the university later reconciled. And Madeleine Pickens, wife of energy tycoon T. Boone Pickens, who has donated or pledged $525 million to Oklahoma State University, pledged $5 million to the university on the condition that its veterinary school stop the practice of performing multiple surgeries on research dogs before putting them down.

To better handle such demands, schools have been changing their approach to fundraising, says Inge Reichenbach, vice president of development at Yale University. Instead of accepting any gift, Yale now encourages potential donors to give in a way that advances any of the school's priorities. Similarly, Stanford University tries to avoid conflicts involving donors by surveying professors and compiling wish lists of needed projects.

Indeed, a number of higher education leaders told the Post that they would turn down a gift if strings attached to the gift ran counter to the school's priorities. "I have known some gifts in which the university just could not agree to the terms," said Ohio State University president E. Gordon Gee. "If there are too many strings attached, you have done yourself a disservice. If someone gave me $100 million to start a school of massage at [the university], I'd have to say, 'Sorry, it's just not in our strategic plan.'"